Cutting your costs, fighting your corner
For immediate release 16 January 2017
Tesco Bank customers stung with unexpected credit card interest charges
MoneySavingExpert.com finds some customers feel ‘misled’ after being caught out by ‘0% interest on purchases’ offer
A '0% interest on purchases' offer for Tesco Bank credit card-holders in the run-up to Christmas has left many "furious" after they were asked to pay unexpected interest charges, a MoneySavingExpert.com story reveals.
Tesco Bank wrote to credit card-holders in October, telling them: "You can now get 0% interest on Tesco purchases until your March 2017 statement". The letter added: "This applies to your Tesco credit card spend in Tesco stores and at Tesco.com between 1 November and 31 December 2016. Remember you don’t have to do anything to activate this offer as it is already available on your account."
Because of this, some customers who normally pay off their balance in full only paid off non-Tesco transactions, and they’re the ones who have been caught out. While they haven’t been charged interest on the Tesco items, they have been charged interest on non-Tesco transactions – even though they thought they’d paid these off.
Tesco says this is because it's charging customers who haven't paid off their card in full interest on the "average daily balance" of their account in line with its terms and conditions – and this means that card-holders are charged interest calculated on the purchases not made at Tesco (and therefore liable for interest). It insists its marketing "accurately described" the 0% offer.
Helen Saxon, MoneySavingExpert.com's chief product analyst, says: "Tesco Bank hasn’t broken any terms and conditions here, but the fact remains that a lot of people have been caught out by its 0% offer.
"We’ve heard it’s refunding people who call to complain about being charged interest when they’ve paid off all their non-0% purchases, which does suggest an acknowledgement from Tesco Bank that this offer could have been better explained. If you’ve been tripped up by this, it’s worth a call to Tesco Bank to ask for your interest back."
David Douglas is a customer who says he's been caught out. He told MoneySavingExpert.com: "I was advised last month that purchases made in Tesco stores or Tesco Direct during November and December would not have to be repaid until mid-March, as a special offer. When I downloaded my credit card statement, interest of £28 was charged – even though all I had unpaid was the special offer item.
"It emerged Tesco would be charging interest on all the balance of the credit card. As an accountant by profession, I am pretty financially savvy on these matters, and I feel very misled by the way Tesco advertised this offer to its credit card-holders."
While Tesco Bank's insisting it's done nothing wrong, and it seems to be within its rights to charge the interest it has, some customers who have rung Tesco Bank to challenge the charges have found it's offered to reimburse them, provided they now pay off their balance in full.
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About MoneySavingExpert.com: MoneySavingExpert.com is dedicated to cutting consumers’ bills and fighting their corner. The free-to-use consumer finance help resource aims to show people how to save money on anything and everything, and campaigns for financial justice. Set up in 2003 for just £100, its free-to-use, ethical stance quickly made it the UK’s biggest independent money website, according to internet ranking site Alexa.com, and the number one ‘Business and Finance – Business Information’ site, according to Hitwise. It has more than 12 million people opted-in to receive the weekly Martin’s Money Tips email, and more than 14 million unique monthly site users who visit more than 24 million times a month. In September 2012, it joined the MoneySupermarket.com Group PLC.